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Organisational productivity
Workplace absence (Unscheduled leave)
Reducing workplace absence can be one of the most effective ways that agencies can improve their productivity. In Australia in 2006, the loss of productivity due to absenteeism was estimated at $18 billion.14 Workplace absence can pose a significant organisational issue for agencies, one with potential to increase employment costs, reduce productivity and reduce the agency’s ability to deliver on business outcomes.
A certain level of workplace absence is an unavoidable element of working life and a normal feature of a healthy work environment. Supporting employees with genuine illness and caring responsibilities underpins the APS as a model employer that promotes family-friendly and flexible working arrangements. For this reason, agencies provide employees with a range of paid and unpaid leave provisions to assist them in meeting their work, family and personal commitments.15 However, this does not mean that all absences should be regarded as inevitable and accepted passively. Studies have found that for organisations with high levels of workplace absence, up to half may be avoidable.16
In the same way that high levels of turnover and workplace injuries can sometimes be indicators of poor organisational cultures, management practices and/or job situations so, too, can high levels of workplace absence. Agencies should be regularly monitoring and analysing workplace absences to identify trends and patterns, and address underlying causes. Managers within agencies can have a direct impact on reducing levels of workplace absence and increasing productivity by creating positive working environments and adopting good management practices.
In 2003, ANAO released a report on managing absence in the APS.17 In response to the issues raised in the ANAO report, in June 2006, the Commission released two better practice guides on managing absence in the APS that are designed to assist agencies and managers develop strategic approaches to managing absence levels in the APS.18 These guides are discussed in more detail below.
Defining workplace absence
The 2003 ANAO report on absence management in the APS found that there was no universally agreed definition of workplace absence in the APS.19It identified the need to develop a uniform APS-wide definition and reporting framework.
The need to measure and report on workplace absence across the APS was emphasised further during the May 2005 Budget estimates hearings, when concerns relating to the level of workplace absence in the APS were raised and a number of agencies were questioned on their progress in implementing the recommendations in the ANAO report.20As a result, the Commission, in collaboration with a range of agencies during 2005–06 developed the following definition of workplace absence for the purpose of APS-wide benchmarking and reporting through the State of the Service report:
Workplace absence refers to absence from work in recognition of circumstances that can generally arise irregularly or unexpectedly, making it difficult to plan, approve or budget for in advance, and which is inclusive of planned medical procedures.21
This APS-wide definition and descriptors of relevant absence categories (see below) are similar to those used by ANAO.22 However, the current APS-wide definition more clearly differentiates workplace absence from planned leave. As part of the definition, workplace absence is divided into the following categories:
- Sick leave—an absence, regardless of duration, whether paid or unpaid, resulting from an employee being too sick or injured to work, or to undergo a planned medical procedure. This category excludes absences related to accepted compensation cases.
- Carer’s leave—an absence, regardless of duration, whether paid or unpaid, resulting from a member of the employee’s immediate family or household, for which the employee has caring responsibilities, being sick or injured and in need of care.
- Compensation—an absence resulting from personal injury or disease sustained out of, or in the course of, employment (i.e. work-related) and accepted by Comcare. The leave includes the total number of days or part days an employee is absent from work due to incapacity. It excludes time spent at work on rehabilitation programmes, where rehabilitation takes place at the workplace in paid employment.
- Specific types of miscellaneous leave—an absence, regardless of duration, whether paid or unpaid, resulting from a personal, family or household emergency, or loss of a close family member or friend.
- Unauthorised absence—an absence, regardless of duration, whether paid or unpaid, that given the circumstances is not supported or approved by management.
Although agencies continue to have the flexibility to record and monitor absence levels using categories that best suit their business needs, following the collaborative work between the Commission and agencies in 2005–06 agencies agreed, where possible, to provide data matching the categories above. These agreed categories and workplace absence definitions were used in this year’s agency survey to collect data on levels of absence across the APS.
Despite the use of a common definition to monitor absence across the APS, the diversity and nature of APS work and agencies’ workforces means that no optimum or standard level of acceptable workplace absence is applicable APS-wide.
Measuring levels of absence
As this year represents the first year that the Commission is reporting on APS-wide workplace absence in the State of the Service report, agencies were given the option in the 2007 agency survey of providing their data by ‘headcount’ or ‘full-time equivalent’ (FTE). In future years the Commission is planning to require all data to be provided by FTE where possible, although agencies who are unable to extract FTE counts from their Human Resources Information System (HRIS) will still be able to report using the headcount measure.
Agencies were asked, where data was available, to report the total number of absence days in 2006–07 for each of the above categories of workplace absence for staff employed under the Public Service Act 1999 (the Act). Where an agency’s HRIS did not allow it to report against each of the categories separately, it was asked to provide a total only—12 agencies indicated this to be the case.
Levels of absence in the APS during 2006–07
Levels of absence varied across the APS in 2006–07. Levels of absence ranged from 1.2 days per employee to 16.4 days per employee (see Table 8.5). The median APS-wide absence rate was 9.4 days per employee.23 Results varied by agency size, with small agencies generally reporting lower levels of absence than medium and large agencies (medians of 7.2 days, 9.4 days and 11.0 days per employee respectively). Where agencies could break down their total absence by absence type, the majority of absence was taken as sick leave (a median of 7.3 days per employee).
Given that two units of measurement were used in the 2007 agency survey to collect information regarding levels of absence, results for agencies that provided their data by headcount or FTE are reported separately. When the ratio of days of absence per employee is calculated using the FTE measure in an agency where some employees are working part-time, the ratio is higher than one that is calculated using the headcount measure. Nevertheless, in most APS agencies this is likely to have a marginal effect. Agencies need to be cautious in making direct comparisons with other agencies.24
| Absence per employee | Headcount or FTE | Agencies |
|---|---|---|
| 0.0 to 5.9 days | Headcount | AFPCS, AIFS, ANMM, Austrade, DHS, NOPSA, ABCC, ONA |
| FTE | FMC, GBRMPA, NCA | |
| 6.0 to 7.9 days | Headcount | ACCC, ASADA, AUSTRAC, AusAID, CGC, Federal Court, FSANZ, Treasury, TSRA |
| FTE | AIHW, ANAO, AOFM, BoM, DEW, HREOC, NMA, OPC, PM&C, Privacy Commissioner, Questacon | |
| 8.0 to 9.9 days | Headcount | ASIC, CDPP, DCITA, DEWR, DFAT, Finance, NWC, Workplace Authority |
| FTE | ACC, AWM, the Commission, CRS Australia, DITR, ITSA, NBA, OWS, Productivity Commission | |
| 10.0 to 11.9 days | Headcount | ACIAR, AGD, ARC, ARPANSA, Customs, DEST, DHA, DOTARS, Ombudsman, MRT/RRT |
| FTE | ACMA, AFC, AHL, AIR, Defence, FaCSIA, NAA, NHMRC, NNTT | |
| 12.0 to 13.9 days | Headcount | AIATSIS, Comcare, ComSuper, DIAC, NLA |
| FTE | AEC, Centrelink, CSA, DAFF, Family Court, Health, IP Australia, Medicare Australia, RAM | |
| 14.0 to 17.0 days | Headcount | ABS, CrimTrac, Geoscience Australia |
| FTE | AAT, ATO, DVA, SSAT | |
| Source: Agency survey | ||
How the APS measures up
Workplace absence rates are often one of the key HR indicators used to benchmark people management performance across agencies, industry sectors and internationally. Nevertheless, care should be taken in making such comparisons given that overall results can be influenced by several factors, including variations in definition, leave provisions, reporting periods and monitoring and recording practices. While not directly comparable, the following results provide some context for absence levels in the APS.
Traditionally, the public sector has reported higher absence rates than the private sector. A 2003 survey conducted by ABS found that for a given two-week period, 9.5% of public sector workers reported that they were absent from the workplace due to illness or injury compared to 6.1% of private sector workers.25 In the UK, public sector employers reported absence rates of 10.3 days per employee compared to 7.2 days per employee for private sector employees.26
It is important to recognise the trade-offs employers face. The difference between the public and the private sectors may to some extent reflect that public sector organisations provide a more extensive range of leave provisions. Given that the public sector often struggles to compete on the remuneration front, particularly at more senior levels and in areas of skills shortages, providing employees with the flexibility to achieve an effective work-life balance is an area where the public sector can gain a competitive advantage in attracting and retaining talented employees—particularly parents of young children and older workers. The composition of an organisation’s workforce is also likely to have an impact on its absence levels. Nevertheless, the results suggest that there is potential to reduce absence levels in the public sector.
Limited data is available to enable comparisons of absence levels across Australian public sector jurisdictions to be made. Comparative data was available only for South Australia, where results were similar to the APS. The APS median sick leave level of 7.3 days per employee is similar to that of the South Australian Public Service that reported an average sick leave level of 7.6 days per FTE over the 2005–06 period.27
Within the APS, the most recent data with which to benchmark this year’s absence levels comes from the 2003 ANAO report.28 There does not appear to have been any overall improvement in levels of absence in the APS over that period. A similar level of absence was recorded in 2001–02 and 2006–07. The median absence level in 2001–02 was 8.9 days per employee compared with 9.4 days in 2006–07 (this small difference is in part likely to be due to methodological differences). The median sick leave level was also similar in 2001–02 (7.0 days per employee) and 2006–07 (7.3 days per employee).
Nevertheless, some agencies have been successful at sustaining lower rates of workplace absence. In consultations with agencies on this issue, the Commission has found that agencies with lower rates of workplace absence tend to be characterised by strong employee job interest and skills alignment to their work. This passion and commitment translates into a common mindset amongst employees who believe that their own day-to-day work is critical to the business of their agency and leads to employees taking on high levels of personal responsibility. Many of these agencies are also smaller in size or specialised in the nature of their business.
Some agencies with higher levels of absence have nevertheless experienced significant reductions in their absence levels. Although there is room for further improvement, the experience of Medicare Australia and Centrelink shows that by taking a proactive approach to managing absence and building up a culture that values attendance, agencies can improve attendance rates.
Medicare Australia
Medicare Australia has achieved a significant decline in absence rates from 15.3 days per FTE in 2001–0229 to 12.2 days per FTE in 2006–07. This has occurred at a time when the agency has been undergoing significant change and growth.
Medicare Australia’s Senior executive team has maintained a commitment to absence management by prioritising strategies and initiatives to better manage absence throughout the organisation, for example:
- developing and promoting a flexible and people-focused Employment Framework that encourages the use of flex time for part-day absences and ties a component of individual pay increases to organisational productivity improvements (including a reduction in organisational absence rates)
- improving monthly reporting to focus on encouraging managers to be aware of absence rates in their teams, and actively managing absences by discussing overall attendance with employees, checking that work-life balance needs are being met, and developing improvement strategies if required
- facilitating manager workshops and employee awareness sessions, that address a number of myths about leave arrangements and establish acceptable practices for discussing leave requirements
- promoting the Employee Assistance Program (EAP) to both managers and employees as another avenue, other than hR, for seeking general guidance and advice in revising the agency’s strategy and approach to managing Workers’ Compensation claims, which now endorses a more active and supportive case management approach—this has seen the 2007–08 Comcare premium rate for Medicare Australia decrease by 24.7%.
Medicare Australia is also seeing the benefits of this approach in other key people performance indicators, such as increasing levels of employee satisfaction and decreasing separation rates.
Centrelink
Centrelink has achieved a decline in absence rates from 15.5 days per FTE in 2001–0230 to 13.7 days per employee in 2006–07. This translates into considerable savings and improved productivity for one of the largest employers in the APS.
In January 2005, Centrelink began a project for improving absence management and leave rates across the organisation. Centrelink used information gathered through in-depth data analysis and consultation with employees to gain an understanding of the underlying causal factors of absences, and to set the direction for an absence management strategy. The strategy broadly focuses on three key areas for improvement:
- communicating the importance of attendance with employees, raising their awareness of the levels of absence and its impact on productivity, and encouraging managers to discuss attendance with their teams
- articulating clear expectations that managers are responsible for the attendance levels in their teams, and supporting them in this area through learning programmes, a resource kit, expert advice and case management guidance
- developing and enhancing a consistent framework for monthly monitoring and reporting of absence rates at the local and national levels, which has been adopted by a number of other agencies.
Centrelink’s attendance strategy links to its workplace health strategy and demonstrates a comprehensive commitment to employees’ wellness at work.
Across the agency managers and employees understand the impact high absence levels can have on organisational outcomes, conversations about absences occur earlier, and flexible solutions are applied to balance business and individual needs and promote a productive work-life balance.
Future State of the Service reports will continue to monitor trends in absence levels in the APS. Agencies must also be vigilant in monitoring their own performance in this area. Agencies are in the best position to understand the possible factors impacting on absence levels and to determine whether workplace absence rates require investigation. Agencies should consider trends and patterns of absence (including at divisional and business unit levels), rather than relying on one overall measure of absence. Even a small reduction in absence can lead to large productivity gains and cost savings.
Presenteeism
An issue related to workplace absence is presenteeism, which is a term used to describe the loss of productivity that occurs when employees come to work, but are not fully functioning because of illness, injury, or a lack of motivation. When compared to absenteeism, presenteeism is considerably less visible in the workplace and harder to monitor. A recent study commissioned by Medibank Private found that on average six working days of productivity are lost for each employee annually as a result of presenteeism.31
The Medibank Private report identified a lack of work-life balance and job related stress as one of the four main causes of presenteeism. There is a cautionary tale here for agencies based on the body of research covering both absenteeism and presenteeism. Agencies need to ensure that in an effort to reduce workplace absences they do not create inflexible approaches that can have unintended consequences, such as disengaging employees and adversely affecting productivity through presenteeism.
Fostering an Attendance Culture
Regular measuring and reporting of absence is a critical first step to enable agencies to diagnose trends and hotspots that can lead to a better understanding of underlying causes and areas on which to focus resources. Regular reporting is also a useful organisational strategy in itself, as it sends the message to all employees that the agency values attendance.
Although this sounds straightforward, the reality is more complex, given each individual’s unique set of characteristics and circumstances, along with organisational and job-related considerations. The Commission’s better practice guide, Fostering an Attendance Culture: A Guide for APS Agencies32 outlines three major influences on attendance:
- Ability to attend—ill-health and injury can affect an employee’s ability to attend work and can be involuntary and unavoidable.
- Barriers to attend—a range of non-related work factors such as emergencies and family responsibilities may contribute to an employee’s workplace absence.
- Motivation to attend—the work context (how the work is organised) and the work content (what the job involves) contribute to stress levels, job satisfaction, commitment and motivation, which in turn affect an employee’s attendance. Good working conditions and job design can impact positively on an employee’s morale and engagement with their work, encouraging them to come to work.
Of these three areas, ‘motivation to attend’ represents the area in which agencies and managers can have the greatest impact. Agencies may also be able to influence employees’ ability to attend by implementing healthy work practices, for example, through corporate health plans and health weeks, sponsoring employee participation in anti-smoking programmes and by sponsoring influenza vaccinations for employees. A range of strategies for fostering an attendance culture is set out in the Commission’s better practice guides.
14 Employee Insecurity Triggers Increase in ‘Sickies’, Benchmarking HR, Vol. 14, No. 297, 20 April 2007, <http://www.crowncontent.com.au/benchmarkinghr.html>
15 Leave provisions within the APS generally fall into one of two types. The first type is planned or scheduled leave, for example, recreation (or annual) leave and long service leave. The other type is unplanned or unscheduled leave (which the Commission refers to as workplace absence), for example, sick leave, carer’s leave and compensation leave.
16 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
17 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
18 Australian Public Service Commission 2006, Fostering an Attendance Culture: A Guide for APS Agencies, and Turned Up and Tuned In—A Manager’s Guide to Maximising Staff Attendance, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au>
19 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
20 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
21 Australian Public Service Commission 2006, Fostering an Attendance Culture: A Guide for APS Agencies, p. 8, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au>
22 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
23 As data was collected using two units of measurement (headcount or FTE) a valid mean cannot be calculated. The impact of using two different units of measurement is not as strong on the median figures, and therefore median figures have been used in the report.
24 Caution also needs to be exercised when comparing data provided using different units of measurement.
25 ABS, Working Arrangements Survey, Cat. No. 6342.0, ABS, Canberra, November 2003.
26 Chartered Institute of Personnel and Development (CIPD), Absence Management, Annual Survey Report 2007, <http://www.cipd.co.uk>
27 Government of South Australia, 2006, The South Australian Public Sector Workforce Information at June 2006: Summary Report, <http://www.cpe.sa.gov.au>. The report gave the figure of 7.9 days per FTE (of which 0.3 days per FTE was the average family carer’s leave).
28 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
29 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
30 ANAO 2003, Absence Management in the Australian Public Service, Performance Audit Report No. 52, 2002–03, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
31 Medibank Private, Sick at Work—The Cost of Presenteeism to Your Business, Employees and the Economy, May 2007, <http://www.medibank.com.au>
32 Australian Public Service Commission 2006, Fostering an Attendance Culture: A Guide for APS Agencies, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au>
